ROGUE ONE, INC. Item 2.01 Completion of Acquisition or Disposition of Assets
As previously reported and on
Under the terms of the Acquisition Agreement, we agreed to issue an aggregate of
forty-seven (47) shares of our Series D Preferred Stock (par value
The Acquisition Agreement was the product of several months of meetings and due
diligence conducted by our officers and directors that resulted in successful
negotiations with the officers and directors of the
We did not employ or utilize the services of any investment banker, advisor, or
other third party in connection with the Acquisition Agreement, the transactions
underlying the Acquisition Agreement or both of them. As a result, we did not
incur or pay any fees to any investment banker, advisor, or other third party
but we may ignored critically important aspects of the business conducted by the
All of the Preferred Shares and all of the Common Shares that were issued in
accordance with the Acquisition Agreement are "unregistered securities" in that
they were issued pursuant to claims of exemption provided by Section 4(a)(2) of
the Securities Act of 1933, as amended (the "1933 Act") and Rule 506(b)
promulgated by the
Human Brands was founded in late 2014 with a plan to capitalize in perceived growth prospects in the consumer alcoholic products industry. In recent years Human Brands has focused on the tequila products segment within that industry as management believes that the tequila products segment may offer stronger sales growth opportunities relative to other consumer alcoholic segments. The management of Human Brands follows a "ground to glass" strategy that, in practical terms, means that management attempts to control marketing, sales, and assets throughout the selection of raw materials (the agave plants) and the operation of the manufacturing process. The strategy also involves selection and constant management of the marketing channels, advertising programs, and target marketing strategies. Human Brands has had to confront ever-rising costs for raw materials as agave prices have increased by about 694% since 2016.
Currently Human Brands has approximately 400,000 agave plants and has adopted a strategy to grow more agave plants to ensure that the company has a stable supply of raw materials and at price levels that may serve to insulate the company from excessive price increases in the market. The company has adopted a two-part strategy: (a) sell agave plants to generate revenues; and (b) at the same time, use agave produced by the company's own agave plants as raw material for the company's tequila products. The Company believes that, if circumstances allow, this strategy may serve to insulate the company from some of the excessive cost pressures in the raw agave market.
Human Brands is also involved in bulk tequila production in that the company
has: (a) an ownership interest in Hacienda Capellania, a top-rated tequila
distillery located in the highlands of
The Partnership currently has supply contracts with (due to the privacy requested/required from our buyers we are not allowed to say anything specific on this) The Partnership currently has supply contracts with fifteen companies, ranging from 5,000 liters per month to 200,000 liters per month. Some of these contracts are with well-established brands and distilleries, celebrities, athletes, restaurant groups, and retailers that we believe may offer significant opportunities for growth in future years if circumstances and market conditions allow. On a limited basis we have conducted our own in-house research with respect to the number of distilleries in the world which we believe now number about 150 tequila distilleries.
All of the research conducted by Human Brands was conducted without the benefit of any independent, professional third-party assessment and there can be no guarantee that and the conclusions reached by Human Brands management would be confirmed by any independent third-party professional. However, the Partnership currently produces 100k to 250k liters of 100% tequila, on a monthly basis, and if circumstances and market conditions allow, the Partnership seeks to produce up to one (1) million liters of production per month in the near future. Any such expansion in operations will likely require significant additional external capital from other sources.
At present, we have not had any preliminary or other discussions with any third parties regarding any interest that such persons may have in providing additional capital or the terms of any such transactions. There can be no guarantee that we will obtain the funds needed for any such expansion or if we do, that we can raise any such funds on a reasonable basis relative current market conditions.
We believe that based on our own internal estimates, there are approximately 150 tequila distilleries worldwide. If market conditions and consumer tastes are favorable, we are hopeful that if industry production does not increase excessively, our business strategy may be prudent.
In addition to the above, Human Brands markets several branded products in the consumer alcohol tequila segment via its ownership in several brands, including: Tequila Armero, Fervor Mezcal, Profano Mezcal, 88 West Rum, and Nevele. The ownership interests are in the form of equity. The Company owns 51% of Tequila Armero, 20% of Fervor, 10% of Profano, 55% of West Rum, and 20% of Nevele.
In recent years the Armero and Fervor brands were launched in the U.S. market
with initial focus on the
If our plans and strategies are successful and using the same marketing template that we used with Armero and Fervor, we may launch Profano, 88 West and Nevele later in 2022. But these plans are subject to favorable market and economic conditions over which we have no control and we may revise our strategies further as conditions upon further review.
We know that competition in the tequila product segment within the consumer alcoholic product market is intense and likely will remain intense for the foreseeable future. Many of our competitors have and likely will continue to have significantly greater marketing, product research, and production skills and resources. If market conditions and our financial circumstances allow, we may consider one or more suitable acquisitions that may compliment our strategies.
Human Brands' subsidiary, CapCity Beverage is a
These include Shinju Japanese Whiskey,
Human Brands also is an 18% owner of one of the most popular restaurants located . . .
Item 9. Changes in and Disagreements with Accountants and Financial Disclosure
Effective
During our two most recent fiscal years and the subsequent interim period
preceding our decision to dismiss
During our two most recent fiscal years and the subsequent interim period prior to retaining BF Borgers CPA PC (1) neither we nor anyone on our behalf consulted BF Borgers CPA PC regarding (a) either the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements or (b) any matter that was the subject of a disagreement or a reportable event as set forth in Item 304(a)(1)(iv) and (v), respectively, of Regulation S-K, and (2) BF Borgers CPA PC did not provide us with a written report or oral advice that they concluded was an important factor considered by us in reaching a decision as to accounting, auditing or financial reporting issue.
Item 9A. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer has
evaluated the effectiveness of our disclosure controls and procedures (as such
term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), in connection with the
preparation of this Annual Report on Form 10-K, as of
Based on the review described above, our Chief Executive Officer determined that our disclosure controls and procedures were not effective as of the end of the period covered by this report.
(b) Management's Report on Internal Control over Financial Reporting
There were no significant changes in our internal controls over financial
reporting that occurred subsequent to our evaluation of our internal control
over financial reporting for the period ended
Our Management is responsible for establishing and maintaining adequate internal control over financial reporting under the supervision of the President and Chief Executive Officer and the Chief Financial Officer. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Management evaluated the design and operation of our internal control over
financial reporting as of
An evaluation was performed, under the supervision of, and with the
participation of, our management, including our Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-(e) to the Securities and Exchange Act of 1934). Based on that evaluation,
our management, including our Chief Executive Officer and Chief Financial
Officer, concluded that our disclosure controls and procedures were not adequate
and effective, as of
We do not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the system are met and cannot detect all deviations. Because of the inherent limitations in all control systems, no evaluation of control can provide absolute assurance that all control issues and instances of fraud or deviations, if any, within the Company have been detected.
This report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the
Item 9B. Other Information
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Our bylaws provide that our board of directors shall consist of at least one member and will be determined by resolution of our board of directors. The number of members of our board of directors is currently one.
The following table lists our directors and provides their respective ages and
titles as of
Name Age Position
(1) Effective
Executive Summaries
Board Committees
The Board does not currently have any committees.
Term of Office
Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our Board and hold office until removed by the Board.
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